BUY SIGM @ $8.49

Sigma Designs Inc. (NASDAQ-SIGM)
Valuation-$16.02
Price July 11, 2011-$8.49

SIGM has fallen recently after their last quarters earnings release. We think this has presented a buying opportunity.

SIGM has $5.27 a share in net cash, 50% gross margins and about $250 million in annual sales.

Their last quarter sales were down 7% from the prior year to about $61 million and they lost $5.7 million versus a profit of $2.5 million. On a non-GAAP basis, they made $2.3 million versus $10 million last year.

With $170 million in cash and trading at 53% of our valuation, we think this is a BUY.

Average trading volume is about 400,000 shares a day.

Sigma Designs Inc.
Sigma Designs, Inc. (NASDAQ:SIGM – News) is a world leader in connected media platforms. The company designs and builds the essential semiconductor technologies that serve as the foundation for the world’s leading IPTV set-top-boxes, connected media players, residential gateways, home control systems and more.

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